Asian stocks declined, led by semiconductor-related shares such as Tokyo Electron Ltd. and Taiwan Semiconductor Manufacturing Co., after an industry report showed equipment orders at North American companies slowed. ``Difficult months are ahead for technology stocks at least until the first quarter of next year,'' said Joji Maki, a Tokyo- based director at Baring Asset Management (Japan) Ltd., which manages $33.5 billion in assets. He said he's avoiding shares of exporters and is investing in retailers.
Morgan Stanley Capital International's Asia-Pacific Index, which tracks more than 900 companies, shed 1.4 percent to 89.28, the first drop in three sessions, at 2:14 p.m. in Tokyo. Japan's Nikkei 225 Stock Average slid 1.7 percent to 11,247.85, set for its lowest close since June 4, after the U.S. book-to-bill ratio report showed slowing orders for equipment that manufactures semiconductors. The Taiex index in Taipei slumped 3.2 percent to 5316.05, an 11-month low. South Korea's Samsung Electronics Co., the world's second-largest semiconductor maker, slid after analysts at HSBC Securities Asia Ltd. and CLSA Ltd. cut their earnings forecasts for the company. Stock benchmarks in all countries declined except those in Thailand and New Zealand. Japanese markets were shut yesterday for a holiday. Tokyo Electron, the world's second-largest maker of semiconductor-production equipment, slid 4 percent to 5,230 yen. Advantest Corp., the world's biggest maker of equipment used to test computer-memory chips, declined 3.7 percent to 6,310 yen.
Book-to-Bill
The book-to-bill ratio for North American chip-tool makers was 1.08 in June, indicating they received $108 in orders for every $100 in sales, San Jose, California-based Semiconductor Equipment & Materials International said yesterday. The ratio was revised to 1.10 in May, compared with 1.13 in April. A reading above 1 indicates growth. ``Even though orders are rising, the rate of growth is contracting, which will weigh on the tech stocks,'' said Norihiro Fujito, a strategist at Mitsubishi Securities Co. in Tokyo. Taiwan Semiconductor, the world's biggest supplier of made- to-order chips, dropped 1 percent to NT$41.80. United Microelectronics Corp. shed 2.8 percent to NT$21.10.
Samsung Electronics dropped 1.5 percent to 420,000 won. HSBC Securities said in a report it expects Samsung Electronics' operating profit to decline 20 percent in the third quarter and 10 percent in the fourth quarter on lower handset and semiconductor margins. Chong Kim, an analyst at CLSA, cut the company's 2004 earnings estimate by 4.5 percent and 2005 forecast by 3.7 percent.
Samsung Electronics reported Friday second-quarter net income almost tripled to 3.1 trillion won, missing the average estimate of 24 analysts surveyed by Thomson Financial.
No Escape
Korean Air Co. and Qantas Airways Ltd. led declines among travel-related shares, while exporters such as Toyota Motor Corp. also dropped after oil futures at a six-week high spurred concern that increased fuel costs will slow global growth. Japan and South Korea import almost all of their oil. ``Oil prices will weigh on the whole market, especially markets like Korea,'' said Park Hyung Ryul, who helps manage the equivalent of $861 million at KTB Asset Management Co. in Seoul. ``From airline shares to manufacturers to banks, there's no company that can avoid the impact of oil prices.'' Korean Air, the country's largest carrier, fell 3.2 percent to 13,550 won. Asiana Airlines, the No. 2 South Korean airline, dropped 2 percent to 2,215 won. Qantas, Australia's national airline, lost 1.2 percent to A$3.38. Singapore Airlines Ltd. dropped 1.8 percent to S$10.80. The Bloomberg Asia Pacific Travel Index, which tracks 27 travel-related shares in the region, fell 0.4 percent.
Toyota, Canon
Toyota, Asia's biggest carmaker, shed 1.4 percent to 4,260 yen. Canon Inc., the world's biggest maker of copiers, declined 1.4 percent to 5,460 yen. Crude oil for August delivery in New York yesterday climbed to $41.64 a barrel on concern soaring demand may have sapped U.S. oil inventories for a second week. That was the highest price for the near-month contract since the futures touched a record $42.45 on June 2. Macquarie Airports, which has stakes in airports in Australia and Europe, gained 1.9 percent to A$2.18. Full-year profit from its Sydney Airport Corp. unit rose 16 percent to A$434.4 million ($318 million) in the year ended June from a year ago, it said. Shares of airport companies in Asia have risen an average 9.7 percent this year, faster than airline stocks, and may extend their rally because of growth in travel, investors such as Matthews International Management LLC's Richard Gao said. ``Airports are natural monopolies, unlike airlines, which are affected by competition and fuel prices,'' said San Francisco- based Gao, who holds Asian airport shares in the $390 million he manages. ``Airports will benefit from the general increase in traffic.'' He declined to identify his holdings. ///www.bloomberg.com